Citadel Premium Income Fund Announces Exchange Offering

CALGARY, ALBERTA--(CCNMatthews - Dec. 19, 2006) - CGF Funds Management Ltd. is pleased to announce the exchange ratios for the Citadel Premium Income Fund (the "Trust") (TSX:CPF.UN) Exchange Offer as announced in the preliminary prospectus of the Trust dated November 23, 2006.

Deposit date and closing: The Exchange Offer was open for acceptance by holders of securities of the Issuers until 4:00 pm (Toronto time) on December 18, 2006 (the "Deposit Date"). The closing is expected to occur on or about December 28, 2006.

Exchange ratio: The number of Trust Units issuable for the securities of each Issuer (the "Exchange Ratio") was determined by dividing the weighted average trading price of such securities on the Toronto Stock Exchange ("TSX") during the period of three consecutive trading days ending on the Deposit Date (the "Pricing Period") by the net asset value per Trust Unit on the Deposit Date.

Net Asset Value: The net asset value of the Trust on the Deposit Date was $10.72 per Trust Unit.

Acceptance: Acceptances have been received which would result in the issuance of 1,447,251 Trust Units (assuming no withdrawals) at a price of $10.72 per Trust Unit. The following table specifies the weighted average trading price of each eligible security and the Exchange Ratio used to determine the number of Trust Units to be issued for each eligible security. The Exchange Ratios and other information disclosed below will be included in the final prospectus of the Trust to be filed with the securities regulatory authorities across Canada. The Exchange Ratios are rounded to five decimal places.

Citadel Premium Income Fund: Citadel Premium Income Fund is a closed-end trust with the investment objectives of:

(a) Distributions: to provide holders of Trust Units with monthly cash distributions in an amount determined and announced from time to time by CGF Funds Management Ltd. (in its capacity as the administrator of the Trust having regard to the Trust's then current portfolio securities and the prevailing economic and market conditions, which is targeted at $0.085 per Citadel Unit until July 2007;

(b) Opportunity for Capital Appreciation: to provide Unitholders with the opportunity for capital appreciation in the net asset value of Citadel; and

(c) Distribution of Net Assets: to distribute the net assets of Citadel to Unitholders on the termination date of Citadel.

Website: To find out more about the Trust, including portfolio holdings, net asset values and investment objectives, please go to www.citadelfunds.com

Citadel Group of Funds: The Citadel Group of Funds is a group of income oriented structured product funds providing investment opportunities to the public. The Citadel Group currently consists of 12 exchange-listed closed-end funds and corporations, including preferred securities and one flow-through limited partnership. The Citadel Group is one of the largest groups of funds in the income trust sector. As of June 30, 2006, the group had over $2.8 billion in gross assets under administration.

Restrictions: The Exchange Offer is not a take-over bid for any of the issuers and is not, and under no circumstances is to be construed as, an offering of any Trust Units for sale in the U.S. or to any resident thereof.